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Creative Protection

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In January 2013, Asetek Danmark A/S sued two parties—Cooler Master USA, Inc., which a month later became CMI USA Inc.; and Cooler Master Co., Ltd., a Taiwanese company—in the Northern District of California, asserting infringement of two of Asetek’s patents, U.S. Patent Nos. 8,240,362 and 8,245,764. All of the accused products are branded “Cooler Master.” A few months before trial, by stipulation, Asetek dismissed with prejudice its claims against the Taiwanese company (hereafter “Cooler Master”). Asetek’s claims of infringement by CMI USA (hereafter “CMI”), and CMI’s invalidity counterclaims, were tried partly to a jury and partly to the court. Asetek prevailed and received a judgment of infringement, and of no invalidity, plus a damages award against CMI of $404,941, based on a 14.5% royalty rate. The district court also entered an injunction covering the specific “Cooler Master” products found to infringe. The injunction runs not only against CMI but also against Cooler Master—which was not then a party (though it later intervened and became one) and which was not adjudicated liable for infringement.

We affirm the district court’s rulings on infringement, invalidity, and damages. We remand as to part of the injunction, i.e., insofar as the injunction reaches conduct by Cooler Master (regarding the covered products) that goes beyond abetting a new violation by CMI. The governing standards for reaching such conduct by persons not adjudicated liable for the underlying wrong, reflected in Federal Rule of Civil Procedure 65(d), are highly fact specific. In this case, a determination of the propriety of the injunction’s reach would benefit from further findings and, if sought and needed, further record development.

Section 289 of the Patent Act makes it unlawful to manufacture or sell an “article of manufacture” to which a patented design or a colorable imitation thereof has been applied and makes an infringer liable to the patent holder “to the extent of his total profit.” 35 U. S. C. §289. As relevant here, a jury found that various smartphones manufactured by petitioners (collectively, Samsung) infringed design patents owned by respondent Apple Inc. that covered a rectangular front face with rounded edges and a grid of colorful icons on a black screen. Apple was awarded $399 million in damages—Samsung’s entire profit from the sale of its infringing smartphones. The Federal Circuit affirmed the damages award, rejecting Samsung’s argument that damages should be limited because the relevant articles of manufacture were the front face or screen rather than the entire smartphone. The court reasoned that such a limit was not required because the components of Samsung’s smartphones were not sold separately to ordinary consumers and thus were not distinct articles of manufacture.

Held: In the case of a multicomponent product, the relevant “article of manufacture” for arriving at a §289 damages award need not be the end product sold to the consumer but may be only a component of that product. Pp. 4–9.

(a) The statutory text resolves the issue here. An “article of manufacture,” which is simply a thing made by hand or machine, encompasses both a product sold to a consumer and a component of that product. This reading is consistent with §171(a) of the Patent Act, which makes certain “design[s] for an article of manufacture” eligible for design patent protection, and which has been understood by the Patent Office and the courts to permit a design patent that extends to only a component of a multicomponent product, see, e.g., Ex parte Adams, 84 Off. Gaz. Pat. Office 311; Application of Zahn, 617 F. 2d 261, 268 (CCPA). This reading is also consistent with the Court’s reading of the term “manufacture” in §101, which makes “any new and useful . . . manufacture” eligible for utility patent protection. See Diamond v. Chakrabarty, 447 U. S. 303 . Pp. 4–7.

(b) Because the term “article of manufacture” is broad enough to embrace both a product sold to a consumer and a component of that product, whether sold separately or not, the Federal Circuit’s narrower reading cannot be squared with §289’s text. Absent adequate briefing by the parties, this Court declines to resolve whether the relevant article of manufacture for each design patent at issue here is the smartphone or a particular smartphone component. Doing so is not necessary to resolve the question presented, and the Federal Circuit may address any remaining issues on remand. Pp. 7–8.

This appeal is the latest chapter in the long-running legal disputes between Becton Dickinson & Co. (“BD”) and Retractable Technologies, Inc. (“RTI”), competitors in the market for syringes of various types and IV catheters. It arises from a $340 million jury verdict (after trebling) entered against BD for its alleged attempt to monopolize the United States safety syringe market in violation of § 2 of the Sherman Antitrust Act. The jury also found BD liable for false advertising under § 43(a) of the Lanham Act. Relying on principles of equity, the district court held that the treble damage award subsumed BD’s liability to disgorge profits from the false advertising, but the court enjoined BD to stop using those ads and notify customers, employees, distributors, and others about the false claims.

We affirm in part, reverse in part, and vacate and remand in part. The § 2 claim for attempt to monopolize is infirm as a matter of law. First, patent infringement, which operates to increase competition, is not anticompetitive conduct. Second, false advertising is a slim, and here nonexistent, reed for a § 2 claim. Third, the allegation that BD “tainted” the market for retractable syringes while surreptitiously plotting to offer its own retractable a few years later is unsupported and incoherent. We affirm the Lanham Act judgment of liability for false advertising but must reverse and remand for a redetermination of disgorgement damages, if any. Finally, in light of the foregoing, we must vacate and remand the injunctive relief for reconsideration.

In this appeal, we review Patent Trial and Appeal Board decisions in three Covered Business Method (“CBM”) reviews. The decisions addressed the subject matter eligibility of certain claims of U.S. Patent No. 6,384,850 (“’850 patent”), U.S. Patent No. 6,871,325 (“’325 patent”), and U.S. Patent No. 6,982,733 (“’733 patent”). For the reasons explained below, we affirm-in-part and reverse-in-part.